If you own an apartment building in Los Angeles and you’re thinking about selling, there is one cost that can catch even experienced investors off guard: the Measure ULA transfer tax. Passed by voters in November 2022 and effective since April 1, 2023, this tax adds a 4% or 5.5% charge on top of all other closing costs for multifamily sales above certain price thresholds and it applies to the entire sale price, not just the portion above the threshold.

For most Los Angeles apartment owners, this isn’t a minor line item. On a $7 million building sale, you’re looking at $280,000, paid at closing. On a $12 million sale, that number climbs past $660,000. Understanding exactly how this tax works and how to approach a sale strategically within the City of Los Angeles is now an essential part of any apartment building sale decision in LA.

This guide covers everything sellers need to know: the current tax brackets, how the thresholds work, what happens with a 1031 exchange, who is exempt, and what the tax actually means for your net proceeds. 

What Is Measure ULA in Los Angeles?

Measure ULA  or officially the “Homelessness and Housing Solutions Tax” is a voter-approved special tax that imposes an additional real estate transfer tax on high-value property sales within the City of Los Angeles. It was passed in the November 2022 general election and took effect on April 1, 2023.

Despite being widely nicknamed the “mansion tax,” Measure ULA is not limited to luxury single-family homes. It applies across all property types: multifamily apartment buildings, commercial properties, industrial sites, and mixed-use developments. In fact, most of the transactions that trigger the tax are apartment buildings and commercial properties, not mansions.

The tax was designed to generate revenue for the Home LA Fund, which supports affordable housing development, tenant protection programs, and services for Angelenos at risk of homelessness. According to the City of Los Angeles Office of Finance, the ULA Tax is an excise tax on the privilege of conveying a real property interest. It is not a tax on the property itself, and it is calculated on the total consideration or value of the property conveyed.

The Los Angeles Office of Finance confirms the current structure: a 4% rate applies to sales above $5,300,000 but below $10,600,000, and 5.5% applies to sales of $10,600,000 or more. These thresholds adjust annually every July 1 based on CPI indexing.

What Does ULA Stand For?

“ULA” stands for “United to House LA,” which is also the name of the nonprofit coalition that campaigned for the measure’s passage. It is sometimes referenced as the Home LA Program or the United to House Los Angeles program. All of these terms refer to the same ballot initiative and the fund it established.

Is Measure ULA Still in Effect in 2026?

Yes. As of June 2026, Measure ULA is fully in effect with no pending repeal. A 2024 ballot measure (Proposition DD) that sought to repeal it was defeated by voters. Legal challenges by the Howard Jarvis Taxpayers Association and the Apartment Association of Greater Los Angeles were dismissed and upheld on appeal in 2025. 

While City Council reform discussions continue, with a May 2026 public hearing drawing significant comment, no changes have been enacted. Sellers should plan their transactions on the assumption that Measure ULA will remain in place.

 

How Much Is the Measure ULA Tax on an Apartment Building Sale?

This is the most practical question for any LA apartment owner contemplating a sale, and the math is more important than it may initially appear.

Current Tax Brackets (July 1, 2025 – June 30, 2026)

Per the City of Los Angeles Office of Finance:

Sale Price	ULA Rate	ULA Tax Owed
Under $5,300,000	0%	$0
$5,300,001 – $10,599,999	4%	4% × full sale price
$10,600,000 or more	5.5%	5.5% × full sale price

Updated Tax Brackets (Effective July 1, 2026)

The City of Los Angeles has confirmed updated thresholds effective for transactions closing on or after July 1, 2026:

Sale Price	ULA Rate	ULA Tax Owed
Under $5,400,000	0%	$0
$5,400,000 – $10,899,999	4%	4% × full sale price
$10,900,000 or more	5.5%	5.5% × full sale price

Real-World Examples

 

Sale Price	ULA Rate	ULA Tax Owed	Total Transfer Taxes (approx.)
$4,500,000	0% — below threshold	$0	~$25,200 (county + city base only)
$5,300,001	4%	~$212,000	~$251,900
$6,000,000	4%	$240,000	~$279,600
$7,000,000	4%	$280,000	~$319,200
$10,000,000	4%	$400,000	~$455,000
$10,600,000	5.5% (crosses upper threshold)	$583,000	~$642,800
$12,000,000	5.5%	$660,000	~$726,900
$15,000,000	5.5%	$825,000	~$907,500

The “Cliff” Effect Is Real and Expensive

One of the most consequential features of Measure ULA is that the tax applies to the full sale price once you cross a threshold. There is no exclusion for the amount below the threshold. This creates a dramatic cliff effect:

A building priced at $5,299,000 owes zero ULA. A building priced at $5,300,001 owes approximately $212,000 in ULA. That means a $1 difference in price can trigger a $212,000 difference in taxes. For properties near either threshold, pricing strategy is not a rounding exercise but a six-figure decision.

 

Does Measure ULA Apply to 1031 Exchanges?

This is one of the most common questions we hear from LA multifamily owners, and it’s critical to understand the answer clearly.

No, a 1031 exchange does not eliminate the Measure ULA transfer tax.

A Section 1031 like-kind exchange allows sellers to defer federal and California capital gains taxes by rolling proceeds into a qualifying replacement property. However, the ULA Tax is a transfer tax, not an income or capital gains tax and it is owed at the moment of closing regardless of what the seller does with the proceeds afterward.

If you close a 1031 exchange on a $7M apartment building in Los Angeles, you will still owe $280,000 in ULA tax at closing. That amount cannot be deferred through the exchange.

However, and this is important, a 1031 exchange is still almost always the right strategy for sellers above the ULA threshold. 

There is one additional nuance: per Treasury Regulation §1.1031(k)-1(g)(7), transfer taxes qualify as transactional costs that can be paid from exchange funds without triggering constructive receipt, so paying the ULA tax from exchange proceeds will not disqualify your exchange or create a taxable boot event.

 

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Can I Avoid or Reduce the Measure ULA Transfer Tax?

This is the right question to ask, but it requires honest, specific answers rather than generic strategies.

1. Price Below the Threshold (If Supported by Market Value)

The most straightforward approach, where the market supports it, is to price your building below the current threshold. If your building’s genuine market value is in the $4.8M–$5.2M range, there may be room to structure the sale price below the ULA trigger. The key word is “genuine“. Buyers are sophisticated and will underwrite the deal based on income and comps regardless of asking price, and artificial price reductions often result in longer time on market or deal failure.

2. Sell Outside the City of Los Angeles

Measure ULA is a City of Los Angeles ordinance. It does not apply to properties in neighboring jurisdictions, even if they share a zip code or are adjacent to LA neighborhoods. Properties in Beverly Hills, Santa Monica, West Hollywood, Culver City, Burbank, Glendale, and unincorporated parts of Los Angeles County are not subject to ULA. If you own property in these areas, your sale is not affected by this tax.

3. Understand the Proportional Transfer Exemption

One narrow structural exemption exists for transfers between entities in which the proportional ownership interests remain identical. If, for example, an LLC transfers a property to a new LLC with the exact same ownership structure and percentage interests, the City of Los Angeles may not assess ULA on that transfer. However, this exemption has strict requirements and anti-avoidance rules, and the City actively scrutinizes entity-level transfers to prevent misuse. This requires specialized tax and legal counsel and is not a blanket strategy. 

4. Verify Nonprofit or Governmental Status

Qualified 501(c)(3) affordable housing developers, community land trusts, limited equity housing cooperatives, and governmental entities may qualify for an exemption under certain conditions. The Los Angeles Housing Department administers these exemptions and has specific experience requirements. Conventional for-profit sellers have no exemption path through this channel.

5. Do NOT Try to “Game” the Transfer With an LLC Contribution

A frequently discussed but legally risky approach involves contributing property to a new LLC and selling LLC interests rather than the real property itself. The City of Los Angeles has robust anti-avoidance provisions in the ULA ordinance specifically designed to capture these transactions. The California State Board of Equalization also has its own Legal Entity Ownership Program (LEOP) which imposes change-of-ownership reassessment rules on entity-level transfers. Anyone considering this approach should retain specialized legal counsel before taking any action.

 

Who Pays Transfer Tax in California for Real Estate?

In California, the real property transfer tax is generally paid by the seller, though this is technically a matter of negotiation and local custom.

Here’s how the layers stack up for a property sold within the City of Los Angeles:

1. Los Angeles County Documentary Transfer Tax:

Collected by the County. The rate is $0.55 per $500 of consideration (or $1.10 per $1,000), equivalent to 0.11% of the sale price. By custom in Los Angeles, the seller typically pays this.

2. City of Los Angeles Base Transfer Tax:

The City’s base documentary transfer tax is $2.25 per $500 of consideration (0.45%). Combined with the County tax, the base rate totals approximately $3.35 per $500, or 0.56% of the sale price.

3. Measure ULA (the ULA Tax):

An additional 4% or 5.5% on sales exceeding the current thresholds, paid by the seller at closing.

For a $7M apartment building in Los Angeles, the total transfer tax burden is approximately:

• County: ~$7,700
• City base: ~$31,500
• ULA: $280,000
• Total: ~$319,200 — nearly all of which is Measure ULA

This is why Measure ULA dominates the conversation around seller closing costs for multifamily properties in this price range.

 

How Does Measure ULA Affect Apartment Building Prices in Los Angeles?

The market-level impact of Measure ULA on Los Angeles multifamily has been substantial and measurable. Based on transaction data and research cited in public policy discussions:

Transaction volume decline: 

Sales of properties above $5M within the City of Los Angeles dropped dramatically after ULA took effect in April 2023. Data cited in City Council proceedings shows the City’s decline running roughly 50% steeper than comparable jurisdictions in the surrounding county, a gap that cannot be explained by interest rates alone, since all cities faced the same rate environment.

Threshold “bunching”: 

A clear behavioral pattern emerged immediately after implementation: properties that would have sold just above $5M are now either pricing below the threshold or not selling at all. This is a textbook economic response to a cliff-edge tax structure and is well-documented in available research.

Buyer underwriting: 

Sophisticated multifamily buyers in Los Angeles now underwrite Measure ULA as part of their acquisition cost model. When a buyer is absorbing $280,000 in ULA tax (even though it’s technically the seller’s obligation), it affects what they’re willing to offer, how they structure financing, and their overall return projections. This has effectively reduced the net proceeds sellers receive not because buyers pay the tax, but because ULA is now a factor in price negotiation.

Investor migration: 

There is documented evidence of investor activity shifting from the City of Los Angeles to adjacent jurisdictions not subject to ULA, particularly Glendale, Burbank, and unincorporated LA County areas, in search of better effective returns.

If you want to understand what this means for your specific building’s current market value and achievable net, check out our 2026 Los Angeles Multifamily Market Report for a data-driven look at where the market actually stands.

 

How Much Does It Cost to Buy an Apartment Building in Los Angeles?

The entry point for apartment building investment in Los Angeles varies widely depending on property size, location, and asset type, but here are realistic benchmarks for 2026:

Small multifamily (2–4 units): 

Duplexes, triplexes, and fourplexes in Los Angeles typically sell in the $1M–$2.5M range for most neighborhoods, though values in Silver Lake, Los Feliz, Echo Park, and WeHo-adjacent areas can push $3M–$4M for a well-maintained fourplex.

Mid-size apartment buildings (5–20 units): 

The most active segment of the LA multifamily market. Depending on location and condition, 5–10 unit buildings typically sell in the $2M–$5M range. 10–20 unit buildings fall in the $4M–$9M range, a band where many transactions land just above the Measure ULA threshold.

Larger apartment buildings (20+ units): 

20-plus unit properties in Los Angeles most commonly trade in the $6M–$20M range, and are almost always subject to Measure ULA. At this scale, the ULA cost at $5M–$20M represents a meaningful percentage of total acquisition cost.

Buyer closing costs: 

In addition to the purchase price, buyers should budget for loan origination fees, title insurance, escrow fees, and inspection costs. Buyers do not pay ULA directly, but it affects deal economics through its impact on seller net proceeds and price negotiation.